German minister praises Kiev, Ukraine seeks EU energy

By Sabine Siebold and Alastair Macdonald

KIEV/DONETSK (Reuters) - Germany's foreign minister pledged to help the new Ukrainian government on Saturday and heard an appeal from the prime minister in Kiev that it will need energy from the European Union to secure it against Russia cutting supplies.

Frank-Walter Steinmeier praised premier Arseny Yatseniuk for statements aimed at reassuring Russian-speakers in the east of the country. Later, after visiting eastern business leaders, the German minister said he believed they backed Ukrainian unity and would oppose secession of the kind seen last week in Crimea.

Ukrainians could be "sure of their neighbors' support".

In Kiev, Yatseniuk said Ukraine would need energy from the European Union to protect it from repercussions of its standoff with Moscow, on which it depends for over half its oil and gas.

Russia's annexation of the majority ethnic Russian Crimea peninsula and warnings of possible intervention in eastern regions have put the ex-Soviet neighbors at daggers drawn since the overthrow of Ukraine's Moscow-backed president a month ago.

Yatseniuk's comments came a day after he signed a landmark association agreement with the EU, committing Ukraine to closer political and economic cooperation with the 28-nation bloc.

Speaking at a briefing in Kiev with Steinmeier, the prime minister said "we need reverse supplies of gas from the EU to ensure the energy security of Ukraine".

Their talks included the possibility that Germany help Ukraine to modernize and strengthen its armed forces.

Russia's annexation of Crimea has brought about the worst confrontation between Moscow and the West since the Cold War.

Steinmeier said the international community must not let the Ukraine-Russia crisis create a new division of Europe. He hoped the first monitors from the OSCE rights watchdog would arrive in Ukraine to support de-escalation efforts in the next couple of days - a move he said would provide clarity on levels of unrest.

Russia asserts that ultra-nationalist groups involved in the overthrow of President Viktor Yanukovich pose a threat to Russian-speakers - a position Moscow used to justify its action in Crimea. Ukraine accuses Russian President Vladimir Putin of fuelling fear and unrest in the east to prepare for an invasion.

Steinmeier welcomed moves by Kiev's transitional government to ensure it took interests of people in eastern Ukraine into account in their policies, referring to a speech by Yatseniuk this week stressing his wish to lead an inclusive government.

"You gave the impression that minority rights would be guaranteed and that is a good signal, which the country needs in the current circumstances," he said to Yatseniuk.

EASTERN OLIGARCHS

Later, in the eastern industrial city of Donetsk, Steinmeier met Rinat Akhmetov, the country's leading industrial magnate, and Serhiy Taruta, a fellow "oligarch" who was appointed this month as regional governor in Donetsk by the new Kiev leadership, with a brief to stem calls for secession to Russia.

The German minister said he came away believing eastern magnates, previously seen as supporters of Yanukovich, had "accepted" that there would be major administrative and economic reforms, with EU help, and a fight against endemic corruption.

"It seems to me that at the moment at any rate this path is accepted and even finds support," he said. "We have heard here today the very pressing desire that the new Ukraine should be a united Ukraine and that there should be no breakup."

Steinmeier visited Donetsk - where a man was stabbed to death just over a week ago during a confrontation between pro-Russian separatists and Ukrainian nationalists - just after a rally by supporters of Yanukovich and of eastern separatism.

He noted that the demonstration, which attracted up to 5,000 people and concluded with a brief standoff with riot police at the regional government headquarters, had been peaceful and that turnout had been relatively low.

Protesters listened to speeches on the city's main Lenin Square, under a statue of the Soviet state founder, and chanted for a return of Yanukovich and for their Donbass coal and steel region to be united with Russia. "Crimea, Donbass, Russia!" they chanted, as well as: "Putin is coming. He'll sort things out."

Pro-Russian protesters early this month seized the local government building where Steinmeier met governor Taruta. But fears of an imminent takeover of eastern regions by separatists appear to have receded, with local leaders and voters waiting to see what further policies emerge from the authorities in Kiev.

(Reporting by Sabine Siebold in Kiev and Donetsk, Pavel Polityuk in Kiev and Alastair Macdonald and Nikolai Pavlov in Donetsk; Writing by Alessandra Prentice and Alastair Macdonald; Editing by Gareth Jones)